Question No 40 Chapter No 15 – USHA Publication 11 Class

Question No 40 Chapter No 15

Question No 40 Chapter No 15

Renewal of Bill

40. Q drew a bill of exchange on P for Rs 4,000 on 1st May 2018 for 3 months. P returned the bill to Q after acceptance it. Q discounted the bill at his bank for Rs 3,900. Just before the due date, P approached Q for the renewal of the bill. Q agreed on condition that Rs 1,000 plus interest on the balance at 6% per annum for 3 months be paid in cash immediately and a new bill for 3 months be drawn for the remaining balance. These condition were carried rupee in full settlement
Give journal entries in the book of P and Q

The solution of Question No 40 Chapter No 15: –

 

In the book of P (Drawee)
Date  Particulars
L.F.DebitCredit
2018     
May.1Q A/cDr. 4,000 
 To Bill payable A/c   4,000
 (Being acceptance given for three months.)    
      
Aug.1Bill payable A/cDr. 4,000 
 To Q A/c   4,000
 (Being cancellation of the old bill.)    
      
Aug.4Q A/cDr. 1,000 
 Interest A/cDr. 45 
 To Cash A/c   1,045
 (Being part of payment made along with the interest.)    
      
Aug.4Q A/cDr. 3,000 
 To Bill Payable A/c   3,000
 (Being new bill acceptance for the balance for 3 months.)    
      
Nov.7Bill Payable A/cDr. 3,000 
 To Q A/c   3,000
 (Being bill dishonoured on Maturity.)    
      
Oct.7Q A/cDr. 3,000 
 To Cash A/c   1,200
 To Deficiency A/c   1,800
 (Being payment of a dividend of 40 paise full satisfaction.)    
     

 

In the book of Q (Drawer)
Date  Particulars
L.F.DebitCredit
2018     
May.1Bill Receivable A/cDr. 4,000 
 To P A/c   4,000
 (Being receipt acceptance given for three months.)    
      
May.1Bank A/cDr. 3,900 
 Discount A/cDr. 100 
 To Bill Receivable A/c   4,000
 (Being receipt of an acceptance for one month.)    
      
Aug.4Cash A/cDr. 1,000 
 To P A/c   1,000
 To Interest A/c   45
 (Being part payment received with interest.)    
      
Aug.4Bill Receivable A/cDr. 3,000 
 To P A/c   3,000
 (Being receipt of new bill for the balance amount for 3 months.)    
      
Nov.7P A/cDr. 3,000 
 To Bill Receivable A/c   3,000
 (Being dishonor of the bill due to P’s insolvency.)    
      
Nov.7Cash A/cDr. 1,200 
 Bad Debts A/cDr. 1,800 
 To P A/c   3,000
 (Being the receipt of a dividend of 40 paise in the rupee in the full satisfaction of our claim against P for Rs 3,000.)    
     

 

Bills Receivable Book | Subsidiary Books | Examples

 

Bills Payable Book | Subsidiary Books | Examples

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Also, Check out the solved question of all Chapters: –

 

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Origin of Transactions

Chapter No. 4 – Vouchers and transactions

Chapter No. 5 – Journal

Chapter No. 6 – Accounting for Goods and Services Tax(GST)

Chapter No. 7 – Ledger

Chapter No. 8 – Cash Book

Chapter No. 9 – Other Subsidiary Books

Chapter No. 10 – Journal Proper

Chapter No. 11 – Trial Balance

Chapter No. 12 – Bank Reconciliation Statement

Chapter No. 13 – Depreciation

Chapter No. 14 – Provisions and Reserves 

Chapter No. 15 – Bills of Exchange

Chapter No. 16 – Rectification of Errors 

Chapter No. 17 – Financial Statements – (Without Adjustments)

Chapter No. 18 – Financial Statements – (With Adjustments)

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